The International Prepaid Communications Association operates a toll-free ombudsman hotline for people who have problems with or questions about prepaid phone cards.

International Prepaid Communications Association
(800-333-3513)

Consumers purchase prepaid telephone cards for the convenience of making long distance calls (domestic and international) without using cash or telephone credit cards. Calls are made using the carrier's 800 number on the card and activating the Personal Identification Number (PIN) number. Cards are normally bought for specific dollar amounts, and minutes are automatically deducted from the total as calls are made based on the carrier's rates. Some cards are "rechargeable", i.e., consumers can add more minutes (not always at the same rate as the initial purchase). Cards can be bought at many different locations, including small markets, grocery stores, discount stores, and online. Most card sellers (except retailers) are subject to California Public Utility Commission (CPUC) jurisdiction. Prepaid card selling companies are required to maintain a 24-hour toll-free customer service number.

The CPUC Web site www.cpuc.ca.gov suggests some things you should know before buying a prepaid phone card:

Confirm the rate. How much are you paying for a minute of conversation time? If the rates are not displayed, read the packaging or promotional displays for the actual rates. Look for domestic and international call rates. Don't be swayed by ads that say "50% cheaper". The question is: Cheaper than what?

Read about all the charges. Before you purchase the card, read the fine print about all the charges. The charges often include activation fees, access fees, weekly or monthly service fees, and additional charges for calling from a pay phone. Avoid buying prepaid phone cards that do not make disclosures.

Do the math. After you have read all the fine print, do the math to figure out what you will be charged. The costs may be significantly higher than the advertised rates.

Is there a toll-free customer service number? Check the packaging of the card for a toll-free customer service number. If you experience a problem, the number displayed on the card should help. Try calling the number before you buy the card. A busy signal on the customer service line could be a tip off of problems to come.

Find out if there's an expiration date on the card. Some firms issue cards without expiration dates, but many cards expire. Make sure the card you buy won't expire within the time you plan to use it.

Make sure the card is in a sealed envelope or has a sticker covering the PIN. Anyone who copies the PIN can use the phone time you have paid for.

Will the retailer make refunds? Ask if the retailer offers a refund if the telephone service is unsatisfactory.

Get referrals. If you have friends or relatives who have used the card ask them the following questions:

Were they charged for a call when there was no answer or when the line was busy?

Was there a minimum charge for each call? For example, were charges based on a minimum of three minutes even though the call lasted only seconds?

Was the access number not available because of a constant busy signal?

Buy a small amount of time. If the carrier is a company you've never heard of, or you don't know someone who can vouch for the card, buy a small amount of time first and see if you like the service.

Requirements for the advertising and sale of prepaid calling cards. Business and Professions Code Section 17538.9.

Any advertisement about the price, rate, or unit value in connection with the sale of prepaid calling services must include a disclosure of any geographical limitations to the advertised price, rate, or unit value, as well as, a disclosure of any additional surcharges, call setup charges, or fees applicable to the advertised price, rate, or unit value. In the case of prepaid cards used at a payphone, the company may instead provide voice-prompted notification of any applicable payphone surcharges.

The following information must be legibly printed on the card:

The name of the company.

A toll-free customer service number.

A toll-free network, access number, if required for service.

The authorization code, if required to access service.

The expiration date or policy, if applicable. Cards without a specific expiration date or policy printed on the card, and a balance of service remaining, are considered active for a minimum of one year from the date of purchase, or if recharged, from the date of the last recharge.

The following information must be printed on the card or packaging and available at the time of sale:

Any surcharges or fees, including monthly fees, per-call access fees, or surcharges for the first minute of use that may be applicable to the use of the prepaid calling card or prepaid calling services within the United States. In the case of prepaid cards used at a pay phone, the company may instead provide voice-prompted notification of any applicable pay phone surcharges.

Whether there are additional or different prices, rates, or unit values applicable to international usage of the prepaid calling card or prepaid calling services.

The minimum charge per call, such as a three-minute minimum charge, if any.

The charge for calls that do not connect, if any.

The definition of the term "unit", if applicable.

The billing information.

The name of the company.

The recharge policy, if any.

The refund policy, if any.

The expiration policy, if any.

The 24-hour customer service toll-free telephone number.

Companies that issue prepaid calling cards must provide a refund to any purchaser of a prepaid calling card if the service fails to operate in a "commercially reasonable" manner. The refund must be for not less than the value remaining on the card or in the form of a replacement card, and provided within 60 days from the date of receipt of notification from the consumer that the card failed to operate in a "commercially reasonable" manner.